A measure of the economic value being created by the firm is:
A)Market value added
B)Economic value added
C)Economic order quantity
D)Market relations model
E)Market insight

Question

Quizplus · Accepted Answer

Economic value added (EVA) is a measure of the economic value being created by the firm. It is a financial performance measure that shows how effectively a company is using its capital to generate profits. EVA is calculated by subtracting the cost of capital from the company's net operating profit after taxes (NOPAT). A positive EVA indicates that the company is generating value for its investors, while a negative EVA indicates that the company is destroying value.

A Measure of the Economic Value Being Created by the Firm